Meta stock forecast: WhatsApp ads could supercharge growth

Meta Platforms (NASDAQ: META) stock price has been in a strong bullish trend in the past few months as the company’s turnaround continues. The shares surged to A year-to-date high of $327 in July. In all, it has soared by more than 266% from the lowest level in 2022, making it one of the best-performing companies in Wall Street.

Whatsapp ads incoming?

Meta Platforms share price has recovered well as investors reacted to the company’s ongoing recovery. As we wrote here, the company’s revenue soared to over $31 billion in the second quarter, up from $28.2 billion in the same period in 2022. Its net income jumped to over $7.7 billion.

Meta Platforms is also benefiting from the rising interest rates. The company spent $207 million in interest payments and then received $323 million in interest income. This led to a net interest profit of over $100 million. The company also benefited from the cost cuts that it implemented earlier this year.

Still, Meta Platforms is facing significant challenges. While Facebook's monthly active users are still strong, their demographics will hurt its growth. Most people actively using Facebook are over 25 years old. This could be a big challenge as more young people spend time in TikTok. 

There are signs that Instagram is also losing traction to TikTok while Threads, its answer to Twitter has lost traction among users.

Now, according to FT, Meta Platforms is deliberating incorporating ads into WhatsApp, the biggest messaging platform in the world. These ads could be displayed both on the status page and between chats. Meta will use a similar model that Google’s Gmail uses to display ads in its platform.

I believe that ads could be a game-changer for Meta Platforms because of WhatsApp’s popularity. Companies will be able to create ads and even communicate with the target market easily. Also, the company will make money by selling subscriptions for people seeking to opt out of ads.

I believe that fears of people moving to other messaging apps are a bit overblown since many of them also use adverts. 

Meta Platforms stock price forecast

The daily chart shows that the META share price has been in a strong bullish trend in the past few months. Along the way, the stock has remained above all moving averages, signaling that buyers are still in control. It has also moved above the 25-day and 50-day moving averages. The Relative Strength Index (RSI) has moved above the neutral point of 50.

Therefore, the shares will likely continue rising as buyers target the key resistance level at $327.20, the highest point this year. A break above that level will see the shares jump to the next key psychological level at $400.